Income tax - top 45% rate scrapped! Bonkers!

[HoppingKangaroo]

The 45% top rate of tax (which currently applies on earnings above £150,000) will be scrapped entirely. How will this help the economy? It will just add to the government debt and it just helps out the very weathly.
Why not have more help for the poorest in the country and not have tax cuts for the very wealthy.

I don't think anyone here will be able to answer your question of 'why'.

Maybe ask Liz Truss?

Totally with you though, it's insanity.

Also what's insane about that shower is that our children will have to pay for any breaks we're getting now, when they could put a windfall tax on the energy companies who are not only getting billions in profits, but many times more in percentage terms than they did before. That doesn't make any sense to me at all.

Someone voted YABU, must be someone earning over 150K or Liz Truss

The much vaunted "trickle down effect" of these policies is a theory only; and LT is prepared to test this on the entire population and risk the lives of poor people.

Does anyone really think any benefit of these policies will trickle down to them?

The trickle down impact of tax cuts for the rich was already discredited back when I was reading Economics in the early 80's.

Think about it.

If a person who is struggling to pay everyday expenses gets more money, they are very likely to spend it immediately, on paying existing bills or possibly, even buying more things.

That money goes straight back into the economy.

If someone with plenty gets more, they are much more likely to save more, rather than increase their spending. That helps them long term, giving them more interest in the future but doesn't do much for anyone else who is active in the economy, as a producer or distributor.

They do like to think they are some home 'better' investing than spending.

It’s utterly blatant isn’t it. Scrapping the cap on bankers’ bonuses, abolishing the top tax rate, cutting corporation tax. It’s a budget for the richest of the rich.

They don't even pretend to care any more. Can they show how that money would trickle down? Nope. The very rich get to hoard it further, buy up more property that no one else can afford and everyone else can scrabble around while public services decline further.

It won't make a jot of difference to anything - less than 0.01% of the population pays at a 45% rate.

The optics are rather odd though.

It’s utter madness. They’ll be punished at the ballot box.

Its disgraceful, we have highest poverty, highest inequality and lowest pensions in western Europe. The creatures in power in this country do not seem to have any humanity. They revolt me.

Thought most of MN were 6 figure salary earners, so this thread should be one of joy....🤷‍♂️

The reason given is that they are trying to tempt back high earners who have chosen to live elsewhere to avoid high tax rates. Footballers, racing drivers, film/music types etc

I'm not convinced.

Rich get richer just as the tories want. They have never given a shit about anyone but themselves and those like them.

What is the highest tax rate elsewhere in Europe?

The ones who like in the tax free enclave of Monaco. Yeah this will tempt them back................

😂

Wrong. Almost 1 in 50 people pay at 45%. See, e.g., BBC 30 June 2022, "... additional rate taxpayers who earn over £150,000 and pay at 45% tax make up around 1.9%, [OBR] said."

You're right about optics. Just a few orders of magnitude wrong in the numbers.

its appalling, and sending completely the wrong signals to the electorate.

As well as general trickle down economics (see also the banker bonus changes), It’s to do with doctors hours and the pension trap. In very basic terms Doctors have extremely good pensions and they hit a point fairly early in in their careers where it isn’t worth them working extra hours.

Once again the poorer and the middle class get hit.

@cigiwi I think the distinction is that you are referring to 1 in 50 of the proportion of the population that pays income tax (obv a huge proportion don't).

My figure was total number of 45% taxpayers (about 600,000 apparently) divided by total population (66m).

Not sure that's true. The middle are getting a 1% cut plus scrapping the1.25% NI surcharge. So the middle get some help.

It's those who aren't earning enough to pay tax who don't benefit.

Tax take increased by £8billion when the 50% rate dropped to 45%.

You could either make hysterical, hyperbolic statements or look at the evidence. I’m sure most people here are in former camp.

@Dannexe they haven't done anything about pension taper relief - that is what is needed to persuade doctors to work more hours.

DH is not happy but I suspect LTPM was not keen to draw attention to the enormous NHS pension while people on ordinary incomes can't afford to heat their homes.

You are working on the false assumption that the government wants to do what is best for the country and the economy. In fact, they realise their time is limited so are just trying to cash in for the benefit of the wealthy as much as possible.

The tiny amounts of gains for ordinary people will be dwarfed by the increases in costs from inflation and fuel prices so most people will be poorer the richest 1% get massively richer. Yay.